NewPage still suffering as CFO resigns; Nebraska Book bonds decline; Capmark Financial rallies

By Stephanie N. Rotondo

Portland, Ore., April 19 - Tuesday's distressed debt market, like the broader markets, rallied from Monday levels a bit and one trader noted that it was "a little busier than I had expected," what with the shortened holiday week.

NewPage Corp. continued to lose ground as investors reacted to news out last week regarding another departing executive. The subordinated paper lost a solid 3 points or more during Tuesday's session.

Meanwhile, there was no news out to explain why Nebraska Book Co. Inc.'s debt dropped about 3 points on the day. Traders noted that volume in the credit was more than usual.

On the positive side, Capmark Financial Group Inc.'s notes moved up as the company filed its plan of reorganization. One trader remarked that the bonds have moved up considerably from last week, when they were trading in the 40s.

NewPage sees more losses

NewPage was the nom du jour, as investors continued to pressure the papermaker's debt in the wake of yet another executive resignation.

One trader said the 10% notes due 2012 were "busy again," trading between 56¾ and 581/4. The bonds were at 60 bid, 61 offered on Monday, the trader said.

"A lot of bonds traded," he said.

He also saw the 11 3/8% notes due 2014 at 99½ bid, par offered, down from par ¼ bid, par ½ offered.

Another trader said the 10% notes were trading around "57 and change," down from 60 previously. The 11 3/8% notes were at 99½ bid, par offered.

"They weren't down as much but they were down," he said of the senior issue.

A third source also saw the 10% notes with a 57 handle and the 11 3/8% notes around 991/2.

The Miamisburg, Ohio-based company's bonds have been weighed down since Friday, when NewPage announced that its chief financial officer, David Prystash, had resigned. Curtis Short, chief accounting officer, will take the role on an interim basis on May 11.

Prystash's departure marks the fourth executive exit since June. E. Thomas Curley left his post as president and chief executive officer, while Mark A. Suwyn resigned as a chairman and director.

Michael Edicola also left this position as vice president of human resources.

Nebraska Book declines

Nebraska Book Co.'s 8 5/8% notes due 2012 saw "a lot of trading," a trader said, though he added that he wasn't "sure what was cooking there."

He pegged the issue at 73½ bid, 74¾ offered, down from 76 1/8 bid, 77½ offered.

Another trader said the issue was trading "in a pretty wide range" between 72 and 74. Still, he said that was down from 77.

"Over the past couple of sessions, they have gone down from the low-80s to the low-70s," he said.

The trader also saw the 10% notes due 2012 "still around par."

At another desk, the 8 5/8% notes were seen around 74.

There was no fresh news out on the Lincoln, Neb.-based textbook reseller.

Capmark bonds rally

A trader said there was "a fair amount of trading" in Capmark Financial Group's 5 7/8% notes due 2012 as the company filed its reorganization plan.

The trader said the issue "bounced back a little bit" to 53 bid, 53 ¾ offered.

"They are up quite a bit from last week when they were trading in the 40s," the trader said. "Guess [investors] like the reorg plan."

Another market source also saw the issue trading with a 53 handle.

Under the terms of the plan, the Horsham, Pa.-based firm will issue $1.25 billion in new debt to unsecured creditors. Those creditors will also receive stock and cash.

Those creditors holding debt with no guarantee will get about $3.89 billion, or about 56%, of what they are owed.

Broad market tidbits

Among other credits in the high yield space, General Motors Corp.'s 8 3/8% notes due 2033 remained weak, ending down nearly a point at 26¼ bid, 27¼ offered, a market source said.

Another trader said OPTI Canada Inc.'s 7 7/8% notes due 2014 were "about the same" at 53½ bid, 54½ offered.

Another source pegged the notes around 54.

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